To alleviate a GST's impact on households, a number of relief measures are proposed alongside its introduction, such as reducing tax rates for all existing taxpayers including rates for Salaries Tax, Personal Assessment, Property Tax and Profits Tax for unincorporated businesses.

The proposed GST framework also includes business tax-relief measures, such as a cut in profits-tax rates and abolishing the capital fee to encourage more businesses to incorporate in Hong Kong.

It is estimated that there would be approximately 20 billion Hong Kong dollars (US$2.58 billion) remaining after meeting all administrative costs and the costs of providing the proposed household, business and charities compensation measures. There would be many options available to return the remaining balance of funds to the community in the form of tax relief or other alternatives.

"We are aware that GST introduction would have widespread implications for Hong Kong. Therefore, we will listen to public views extensively before making a recommendation to the government of the next term to consider whether and if so, how Hong Kong should pursue tax reform and introduce a GST," Tang said.